Ethereum’s development philosophy has long prioritized technical progress — scalability, decentralization, and security — while rarely addressing how these protocol upgrades affect ETH’s economic equilibrium.
Each major change, from EIP-1559 to Dencun and now Fusaka, reshapes the relationship between supply and demand for ETH, yet the Foundation’s upgrade process largely omits any financial assessment of these shifts.

The upcoming Fusaka upgrade and its key component, PeerDAS (EIP-7594), mark another critical step in Ethereum’s scaling roadmap. PeerDAS introduces a new networking protocol that enables nodes to verify data availability through sampling rather than downloading full blobs. This innovation allows Ethereum to raise its per-block blob limit — increasing throughput for Layer 2 (L2) rollups while preserving security and decentralization.

But from a financial standpoint, PeerDAS could also amplify a troubling dynamic: expanding supply (blockspace and data capacity) ahead of real demand, which risks eroding the economic value captured by ETH itself.

When EIP-4844 (Proto-Danksharding) launched with Dencun in early 2024, it introduced a dedicated blob fee market for rollups. The idea was simple: rollups would post their compressed transaction data to Ethereum L1 as blobs, paying fees in ETH for data availability — a new source of network revenue and potential ETH burn.

Initially, blob fees surged. The market was active, utilization high, and fees per blob reached meaningful levels. But this excitement was short-lived.

Recent Dune Analytics dashboards show that:

• Blob submission fees have fallen dramatically since April 2024.

• The blob base fee has collapsed, often nearing the protocol minimum.

• Utilization of blob space remains far below the target.

In practice, blob submissions — once seen as a future fee engine — now contribute negligible revenues to Ethereum. The network successfully became cheaper and more scalable for rollups, but failed to convert that success into financial value for ETH holders.

PeerDAS improves technical efficiency by allowing nodes to verify blob data through sampling. This reduces per-node bandwidth and storage requirements, enabling Ethereum to safely raise the blob target per block (from 9 → 15 → 21 under Fusaka’s BPO1 and BPO2 upgrades).

However, this increase in supply collides with a stagnant demand curve.

The current blob market is already underutilized. Increasing blob capacity again — without a proportional increase in rollup demand — will likely:

• Push blob fees even lower,

• Reduce ETH burned through blob transactions, and

• Further weaken the monetary premium of ETH.

This dynamic mirrors classic supply-side inflation: a growing capacity of blockspace and data availability with insufficient usage to sustain prices. In economic terms, Ethereum is front-loading supply, hoping that future adoption will justify it.

From a technical viewpoint, more blobs per block look like progress. From a financial viewpoint, it resembles overproduction in a market with price-inelastic demand. The equilibrium shifts to lower prices — great for users and rollups, but detrimental for ETH as a value-accruing asset.

Ethereum is scaling ahead of demand, not because of demand — and the fee market reveals it.

ETH’s economic value depends on two key channels:

1. Demand for ETH – as gas for transactions, collateral for staking, and fee currency for L2 submissions.

2. Supply reduction – through burning of base fees (EIP-1559) and net issuance after staking rewards.

If blob submissions are cheap and infrequent:

• Less ETH is demanded for fees;

• Less ETH is burned to offset issuance;

• The token’s real yield to holders and stakers declines.

Ethereum, paradoxically, is becoming a cheaper and more efficient settlement layer, but one that captures less of the value it enables. The growing success of L2 ecosystems (Base, Arbitrum, Optimism, zkSync) has not translated into ETH demand or fee revenue, because the cost of interacting with L1 — the price signal that underpins ETH’s monetary role — has collapsed.

Technically, PeerDAS is a masterpiece of protocol design:

In other words, PeerDAS makes Ethereum technically leaner but economically thinner.
The total data availability throughput may multiply, but the value captured per unit of throughput — denominated in ETH fees burned — is shrinking.

The Foundation’s roadmap continues to treat economic analysis as secondary.
Each EIP is rigorously reviewed for security, implementation, and decentralization, but never for its impact on the token’s financial equilibrium.

This is a strategic blind spot. Monetary equilibrium — the balance between ETH supply (issuance minus burn) and demand (fees and staking) — is what ultimately determines ETH’s value.
Neglecting it risks turning Ethereum into a high-throughput public utility that benefits users but not the asset that secures it.

From a financial perspective, scaling should not be unconditional.
It should respond to utilization thresholds — expanding capacity only when demand consistently exceeds supply (e.g., >80 % of blob target for several epochs). Otherwise, every new increase dilutes scarcity and compresses fees.

Possible mitigations:

• Dynamic scaling policy: blob capacity increases only when network utilization sustains high levels.

• Fee floor or adjustment factor: introduce a minimal base fee to preserve burn value.

• Demand linkage mechanisms: align L2 fee markets or sequencer staking with ETH demand (e.g., require ETH bonding or partial payment in ETH).

These mechanisms would allow Ethereum to maintain its long-term scalability vision without undermining the monetary soundness of ETH.

PeerDAS and the Fusaka upgrade represent real technical progress — the network becomes lighter, faster, and more scalable. But economically, Ethereum is drifting into an equilibrium of abundant capacity and vanishing fees.

Scalability without value capture turns Ethereum into a utility, not a capital asset.

If the network continues to expand blob supply without binding it to genuine demand, ETH risks losing its reflexive monetary properties — the self-reinforcing loop between usage, fee burn, and scarcity.
Ethereum’s challenge for the coming era is not how to scale, but how to ensure that scaling strengthens the asset that secures it.